Learn more here: http://hubs.ly/H08mrmv0 Much like the four elements of Greek Mythology, there are four commonly known elements of successful ERP implementations: - data management - standardized and shared data - operational philosophy - business strategy Did you know there is a 5th and final element, which serves as the foundation for the rest to work? These are the 16 KPIs for ERP success. It’s an expanded level of knowledge brought about by the use of key performance indicators. This is crucial to the success of your ERP implementation. Learn more here: http://hubs.ly/H08mrmv0

1. 5TH ELEMENT
FOR ERP SUCCESS
THE 5TH ELEMENT OF ERP:
16 KEY PERFORMANCE INDICATORS
Much like the four elements of Greek Mythology, there are four commonly
known elements of successful ERP implementations:
Did you know there is a 5th and final element, which serves as the foundation for the
rest to work? It’s an expanded level of knowledge brought about by the use of key
performance indicators. This is crucial to the success of your ERP implementation.
Measuring the essential 16 ERP KPIs can help to answer two fundamental questions
about the health of your manufacturing operations:
How well are you using the system to
manage the flow of material from
suppliers and through the internal
supply chain?
How well are you making and
keeping promises to
customers and the resulting
profit for stakeholders?
INVENTORY
ANALYSIS
1
Looks at the levels of
stockroom inventory
and establish trends
over time.
PROJECTED
INVENTORY
ANALYSIS
1
4
Establishes the rate of
production for the
period of time defined
by your cumulative
manufacturing
lead-time.
SUPPLIER
PERFORMANCE
ANALYSIS
8
Analyzes how well
suppliers are
delivering based upon
their quoted delivery
date, and determine
candidates for
replacement.
LEAD TIME ANALYSIS
(INCOMING)
9 Uncovers how well the system is
planning with further analysis of
supplier performance through review
of actual versus planned lead-time.
WORK IN PROCESS ANALYSIS
6
Determines the
current values of
inventory controlled
by release shop
orders, not only at the
total value but also
the percentage of
each aging bucket to
the total WIP value.
PURCHASE PRICE
VARIANCE ANALYSIS
10
Determines how well you are
purchasing according to
standard costs and planned
material budgets.
OBSOLETE, SURPLUS AND
ACTIVE (OSA) ANALYSIS
7
Establishes processes to determine why
excesses are being created, and then
develop a plan of action to dispose of it.
ABC ANALYSIS
2
Finds the parts that
are most significantly
affecting inventory
and cost of goods sold
values by measuring
inventory velocity.
INVENTORY
TURNS
ANALYSIS
3
Effectively turns
inventory faster by
understanding the
relationship between
COGS and inventory
values.
1
QUOTED
LEAD-TIME
(OUTGOING)
ANALYSIS
14
Measures how well you
are promising customer
deliveries around your
current lead-times.
5
SAFETY STOCK ANALYSIS
Monitors supply chain conditions and
identify and manage trends to
determine the ideal balance of parts
to buffer forecast errors,
uncertainties in lead times, and
desired service levels.
SALES ORDER ANALYSIS
11
Monitors open sales orders in relation
to their due dates to take effective
action on past due orders, as well as
watching the sales horizon on future
sales.
AGED SALES ORDER ANALYSIS
12
“Slices and dices” the dollar amount of
open sales orders to assess the overall
health of the business.
SHIPPING
PERFORMANCE
ANALYSIS
13
Determines the rate
of orders shipped in
the right quantity at
the promised time,
and how well you are
meeting the promises
made to customers on
sales orders.
INVOICE ANALYSIS
Monitors the overall health of
the business by measuring the
dollar amount of sales orders
shipped and invoiced.
PROFIT ANALYSIS
Tracks the profit generated by
period, by customer, to understand
which customers are contributing,
both favorably and unfavorably, to
the bottom line.
15
16
Does your ERP system easily
measure these KPIs?
Learn more about the 5th element of ERP
max4erp.com/5th-element-erp
DATA
MANAGEMENT
STANDARDIZED
AND SHARED
DATA
OPERATIONAL
PHILOSOPHY
BUSINESS
STRATEGY